In Need of a Tune Up: Wisconsin’s Court of Appeals Considers Personal Jurisdiction in the Internet Age

Last year, we wrote about the Seventh Circuit’s interpretation of the emerging issue of personal jurisdiction in the context of internet activity. Courts understandably have been wary of subjecting businesses to broad jurisdiction in all 50 states based solely on an internet presence. The Wisconsin Court of Appeals continued this trend with its decision last week in Carlson v. Fidelity Motor Group, LLC, No. 2014AP695 (Jan. 14, 2015), a decision written by Judge Gundrum.

Eric Carlson, a Wisconsin resident, saw an advertisement for a used BMW from Fidelity Motor Group on the cars.com website, called Fidelity and discussed the car briefly, and Fidelity followed up with another call. The same day, Carlson traveled to the Fidelity dealership in Illinois and bought the car. He later sued Fidelity, claiming the car sustained damage due to Fidelity’s failure to change the car’s oil as he and his wife had requested.

Carlson filed his suit in Ozaukee County, Wisconsin. He submitted screenshots of Fidelity’s website and its advertisements on 14 other websites (including cars.com), along with evidence of the phone calls. For its part, Fidelity averred undisputed facts as to its lack of any other business in or contacts with Wisconsin, “except to the extent that [Fidelity’s] website is accessible to Wisconsin residents.” The circuit court dismissed the suit for lack of personal jurisdiction.

The Court of Appeals, District II, affirmed. It found that it was “clear” that due process was not satisfied under the analysis for minimum contacts and thus skipped any consideration of Wisconsin’s long-arm statute (Wis. Stat. § 801.05).

In reaching its decision, the court relied heavily on a Wisconsin case that had emphasized that the facts before it were not merely a “one-time transaction,” and had found jurisdiction proper, Kopke v. A. Hartrodt S.R.L., 2001 WI 99, as well as a South Dakota case with similar facts that found that the only contact was “one isolated sale” and that that singular event could not create personal jurisdiction. The Carlson court repeatedly stressed the limited record before it, distinguishing this apparent “one-time transaction” from the situation in Kopke, involving a “‘regular course of dealing that result[ed] in deliveries of multiple units of the product into [the] forum over a period of years.’” Carlson, furthermore, had “neither alleged nor presented any evidence indicating Fidelity ever sold a vehicle to anyone else from Wisconsin.”

It appears that Fidelity was located less than 30 miles from Wisconsin, making one wonder if the paucity of Carlson’s allegations in his complaint was the real cause of the dismissal. In all likelihood, Carlson was not the only Wisconsinite to buy from Fidelity, and perhaps further proof to that effect could have made a difference. The Carlson court stated that, “[s]ignificantly, Carlson has neither alleged nor shown facts suggesting Fidelity targeted Wisconsin residents with its Internet advertisements any more than any other state’s residents,” and quoted a federal district court case making a similar point. That thinking echoes the Seventh Circuit’s Advanced Tactical decision, discussed in our post last year, which found contacts insufficient but noted that “[i]t may be different if there were evidence that a defendant in some way targeted residents of a specific state, perhaps through geographically restricted online ads.”